Stockholders' Equity

6 Months Ended

Jun. 30, 2020

Stockholders’ Equity

Common Stock — Our authorized capital stock consists of 60,000,000 shares of common stock with a par value of $0.01 per share; of which, 30,985,669 and 30,801,255 shares were issued and outstanding as of June 30, 2020 and December 31, 2019, respectively.

Preferred Stock — Our authorized capital stock also consists of 5,000,000 shares of preferred stock with a par value of $0.01 per share; no preferred shares were outstanding as of June 30, 2020 and December 31, 2019.

Earnings Per Share — Basic earnings per share is determined by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share presented is determined by dividing net income by the weighted average number of common shares and potential common shares outstanding during the period as determined by the Treasury Stock Method. Potential common shares are included in the diluted earnings per share calculation when dilutive. Diluted earnings per share for the three and six months ended June 30, 2020 and 2019 includes the effect of potential common shares issuable when dilutive, and is as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019 (as restated)		2020		2019 (as restated)
Net (loss) income	$	(12,497)	$	6,146	$	(37,091)	$	16,132
Weighted average number of common shares outstanding (in '000s)	30,890		30,547		30,848		30,530
Dilutive effect of restricted stock grants after application of the Treasury Stock Method (in '000s)	—		277		—		201
Dilutive shares outstanding	30,890		30,824		30,848		30,731
Basic (loss) earnings per share	$	(0.40)	$	0.20	$	(1.20)	$	0.53
Diluted (loss) earnings per share	$	(0.40)	$	0.20	$	(1.20)	$	0.52

The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error. See Note 3 for details.

There were 396 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the three months ended June 30, 2020 and no outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per shares for the three months ended June 30, 2019. There were 286 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per share for the six months ended June 30, 2020 and 18 thousand outstanding restricted shares awarded that were excluded from the calculation of diluted earnings per shares for the six months ended June 30, 2019.

Dividends — We have not declared or paid any cash dividends in the past. The terms of our debt and credit facilities (as described in Note 14) restrict the payment or distribution of our cash and other assets, including cash dividend payments.

The changes in stockholder's equity are as follows:


	Six Months Ended June 30, 2020
	Common Stock					Treasury Stock		Additional Paid In Capital		Retained Deficit		Accumulated Other Comp. Loss		Total CVG Stockholders’ Equity
	Shares (in thousands)	Amount
Balance - December 31, 2019	30,801	$	323	$	(11,230)	$	245,852	$	(60,307)	$	(45,950)	$	128,688
Share-based compensation expense	46	—		—		862		—		—		862
Total comprehensive income	—	—		—		—		(24,594)		(8,030)		(32,624)
Balance - March 31, 2020	30,847	$	323	$	(11,230)	$	246,714	$	(84,901)	$	(53,980)	$	96,926
Share-based compensation expense	138	(14)		—		868		—		—		854
Total comprehensive income	—	—		—		—		(12,497)		2,578		(9,919)
Balance - June 30, 2020	30,985	$	309	$	(11,230)	$	247,582	$	(97,398)	$	(51,402)	$	87,861


	Six Months Ended June 30, 2019
	Common Stock					Treasury Stock		Additional Paid In Capital		Retained Deficit ¹		Accumulated Other Comp. Loss		Total CVG Stockholders’ Equity
	Shares (in thousands)	Amount
Balance - December 31, 2018 (as restated)	30,513	$	318	$	(10,245)	$	243,007	$	(76,013)	$	(47,471)	$	109,596
Share-based compensation expense	—	—		—		761		—		—		761
Cumulative effect of adoption of Topic 842	—	—		—		—		(72)		—		(72)
Total comprehensive income	—	—		—		—		9,986		(206)		9,780
Balance - March 31, 2019 (as restated)	30,513	$	318	$	(10,245)	$	243,768	$	(66,099)	$	(47,677)	$	120,065
Share-based compensation expense	68	1		—		718		—		—		719
Total comprehensive income	—	—		—		—		6,146		1,955		8,101
Balance - June 30, 2019 (as restated)	30,581	$	319	$	(10,245)	$	244,486	$	(59,953)	$	(45,722)	$	128,885

^1.The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error. See Note 3 for details.

Shareholder Rights Plan

On June 23, 2020, the Company’s Board of Directors adopted a limited duration rights plan and declared a dividend distribution of one right (each, a “Right” and together with all other such rights distributed or issued pursuant thereto, the “Rights”) for each outstanding share of common stock, par value $0.01, of the Company, as of July 5, 2020, the record date for such dividend. Each holder of Common Stock as of the record date will receive a dividend of one Right per share of Common Stock. The Rights will become exercisable only if a person or persons acquires beneficial ownership of 10% or more of the Company's outstanding common stock, or 15% in the case of certain passive investors. In the event that the Rights become exercisable, each holder of Rights (other than the person or group triggering the rights plan) will be entitled to purchase, at the Right’s

exercise price, a number of shares of our common stock having a market value of twice the Right’s exercise price. The rights plan will expire on June 24, 2021 unless earlier terminated or amended by our Board of Directors.